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The Cost of Insuring Hybrid Cars

With the rising cost of gasoline, you may consider running the numbers to determine if you should swap your solely gasoline-powered vehicle for a gasoline-electric hybrid. While hybrids cost less to fuel, they do, on occasion, require more extensive repairs and expensive parts. As a result, these cars could be more expensive to insure. However, how much extra depends on the model, your circumstances, and the type of auto insurance you want. Read on to learn more.

Are Hybrids More Expensive to Insure? 

Insuring a hybrid can be more expensive than similar cars because repairing or replacing the vehicle’s parts is not cheap. In addition, some hybrid models require specialty mechanics to complete repairs.

However, exactly how much more expensive depends on the car itself and the insurance company. For example, some insurers may offer discounts of up to 10% for hybrid vehicles. Check with your current auto insurance company to get an estimate for the hybrid car you are interested in purchasing or work with trusted auto insurance agents to receive multiple quotes so you can get a better idea of how much you can expect to pay.

How Much Does it Cost to Insure a Hybrid Vehicle?

The exact price you should expect to pay on insurance for hybrid cars depends on many factors in addition to the car being a hybrid, such as your driving history, age, and location. However, there are some broad assumptions you can make when it comes to insuring a hybrid in comparison to another type of vehicle.

Hybrids vs. Gas-powered Cars 

Consulting the National Highway and Transportation Safety Administration’s report on the average loss payout per insured vehicle provides an idea of hybrid car insurance costs. Generally, higher average payouts will lead to higher car insurance rates. With that in mind, hybrid payouts are larger than standard gas-powered cars on average, so hybrid insurance is likely higher than that of gas-powered vehicles. Here are some examples: 

  • The average loss payment for a gas-powered Honda Accord is $96, whereas the loss payment for a hybrid Honda Accord is $103.
  • The average loss payment for a gas-powered Toyota Highlander 4-door 4WD is $90. The hybrid version of the same vehicle has an average loss payment is $100.

While this cost difference is relatively small, it likely translates to a slightly higher insurance rate for hybrids in comparison to gas-powered cars.

Hybrids vs. Electric Cars

Unlike an electric vehicle (EV), you cannot plug in a standard hybrid. However, it should be noted that some vehicle manufacturers have produced plug-in hybrid vehicles (PHEV) that bridge the gap between hybrid and fully electric cars. PHEVs allow you to recharge the battery from an outlet, like an EV, but also still take gasoline.

But whether compared to a standard hybrid or PHEV, fully electric cars will likely involve more expensive technology and materials, making it more costly to insure. 

According to research from Consumer Reports, insurance for EVs tends to be higher than similar gas-powered or hybrid cars. However, how much of a price difference there is depends on the make and model of the cars themselves. Fully electric Teslas, which are already more expensive, cost more to insure than a gas-powered, hybrid, or fully electric Nissan, while the insurance rate for a fully electric Nissan is comparable to that of a hybrid Nissan.

However, unlike hybrid cars, electric vehicles may be eligible for state rebates. For example, Oregon offers a rebate for EVs to encourage more drivers to purchase or lease these types of vehicles. This can offset the heightened cost of insurance for electric cars.

Are Hybrid Cars As Safe As Other Cars?

Do not mistake the generally higher cost to insure hybrid cars as a reflection of their safety. While hybrid cars may be more expensive to insure, they’re safe to drive. Hybrid vehicles undergo extensive safety testing and must meet the same federal safety crash standards as gas-powered cars. In fact, hybrid vehicles are even on the IIHS’s annual list of top safety picks

A sealed shell holds the hybrid’s electric battery, so it’s safe, even if a short circuit, fire, flood, or crash occurs. Electrical batteries undergo their own testing regimen. The electrical system deactivates if a collision or short occurs. 

So while hybrid vehicles may cost more to repair, and therefore cost more to insure overall, this does not impact its safety for drivers.

Other Factors That Affect Insurance Costs 

Insurers look at more than just what type of fuel your car uses when determining auto insurance rates. Other factors that impact your insurance costs include:

Your Age and Driving History 

The younger you are, the more you may pay for auto insurance. Teens have the highest auto insurance rates, with premiums dropping for young adults. This is because younger drivers are less experienced behind the wheel, and so more likely to get into collisions.

Your driving history influences your premium to a large degree, too. You will likely pay higher premiums if you’ve been in accidents, received tickets, or tend to make many claims. The insurer looks at your risk history and guesses what you may cost them in the future. 

Where You Live 

An insurer looks at a location in a few ways, including the likelihood of being in an accident or experiencing theft. If you live in a place with more crime — such as a large city — your insurance rate may be higher, as the insurer hedges against your hybrid car getting damaged or stolen. 

How You Commute

When setting your rates, the insurer will also consider how many miles you put on the odometer annually. Do you drive to and from work, school, or work from home every day? More miles on the road may increase your likelihood of an accident.

Whether You Buy or Lease 

If you purchase a hybrid vehicle outright, you only need to meet state insurance minimums. But if you lease a hybrid car, your leasing company may require you to carry additional insurance that could increase your rates. If you’re leasing a car, the vehicle does not belong to you. You may also pay more if you took out an auto loan because technically, the car is not yours until you’ve paid it off.

To better protect their investments, many leasing companies and lenders require drivers to have comprehensive and collision insurance. These coverages protect the car and ensure its repair if the vehicle is damaged.

Your Vehicle’s Make and Model 

Your vehicle’s make and model can impact your hybrid car insurance prices. Cars that cost more at the lot will likely cost more to insure, with an accident leading to payouts for expensive parts or mechanics.

When it comes to hybrid vehicle insurance costs, imagine buying a newer, less-common hybrid car with high-tech components, a performance engine, and expensive, hard-to-find parts. This car may seem like a potentially costly headache for your insurer if you’re in an accident. On the other hand, if you buy a more common hybrid car that is not flashy but offers a dependable pedigree, your insurer may see it as a lower risk and charge less for your policy.  

Overall, hybrid technology usually makes these cars more expensive than a similar vehicle. For example, a 2022 Toyota Corolla Hybrid LE costs $3,175 more than a gas-powered 2022 Toyota Corolla LE. The model contributes to insurance pricing, too, particularly for premium features like leather seats and more technology. 

How You Can Lower Your Hybrid Car’s Auto Insurance Rate

If you’re interested in buying or leasing a hybrid car but are concerned about high insurance premiums, there are several ways you could help lower your rates.

  • Increase your deductible: A deductible is the amount you pay out of pocket before your insurance coverage kicks in. Choosing a higher deductible means you would handle more of the upfront costs, so insurers will typically lower your monthly premium.
  • Bundle insurance policies: Many insurance companies offer discounts when you bundle multiple insurance policies with them. For example, you can bundle your car insurance and homeowner’s insurance policies. Check with your insurer to see whether they offer bundle discounts.
  • Drive a safe car: Insurance rates can be lower for cars that have high safety ratings and are less likely to be stolen. Research which of your top picks for a hybrid vehicle has the highest safety records and ratings.
  • Shop around: Don’t seek quotes from just one insurer. Shopping around and comparing insurance rates from different insurance companies can help you find the best deal.

Putting It All Together

While hybrid cars are generally less expensive to fuel, their insurance cost may be slightly higher compared to gas-powered cars due to the potential for a higher loss payment. Ultimately, when you are considering switching to a hybrid car, it is a good idea to check with your current auto insurance company or speak with a trusted agent to get multiple quotes to estimate how much extra you can expect to pay.

Find an auto insurance policy that meets your needs.

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Find an auto insurance policy that meets your needs.

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